Ahead of Market: 10 things that will decide D-Street action on Wednesday

Indices on Tuesday ended with gains after choppy trade, with Nifty settling above 18,400 levels at the close. Broader markets, however, underperformed the headline indices. Within the Nifty pack, ONGC, Power Grid, ICICI Bank, Bharti Airtel led the list of gainers.

Here’s how analysts read the market pulse:

Vinod Nair, Head of Research at Geojit Financial Services, said, “Following gains in global equities, early losses in the domestic market were reversed with banking stocks steering the recovery. Food and commodity price declines have helped keep domestic inflation below 7%. Although the CPI has continued to remain above the RBI’s tolerance limit of 6%, it is estimated that it will begin to fall within the range from Q1 FY24.”

Rupak De, Senior Technical Analyst at LKP Securities, said, “The headline index Nifty remained volatile during the session. On the lower end, 18,300 acted as support on a sustained basis, whereas on the higher end, the index moved above 18,400. The trend remains positive for the short term, as the index closed above the 50 EMA. On the higher end, resistance is placed at 18,500/18,600. Support on the lower end is pegged at 18,250-18,300 zone.”

That said, here’s a look at what some key indicators are suggesting for Wednesday’s action:

US market
The tech-heavy Nasdaq led Wall Street's main indexes higher on Tuesday as data providing further proof of cooling inflation boosted bets of smaller interest rate hikes by the Federal Reserve.

The Labor Department's producer prices index rose 8% in the 12 months through October, lower than an estimated 8.3% rise, according to a Reuters poll of economists.

Excluding volatile food and energy costs, the index rose 5.4% on an annual basis last month after increasing 5.6% in September.

As US Treasury yields fell, shares of megacap tech and other growth stocks such as Apple, Amazon and Alphabet rose between 2% and 4%.

Shares of Walmart jumped 6.6% after raising its full-year net sales expectations, with the upbeat outlook boosting shares of other big retailers such as Target Corp and Macy's Inc. The S&P 500 retail and consumer discretionary sectors were up more than 2% each.

US-listed shares of Chinese firms including JD.Com, Alibaba Group Holding rose between 7% and 10% after President Joe Biden and Chinese leader Xi Jinping's meeting on Monday where they pledged more frequent communications.

At 09:50 am ET, the Dow Jones Industrial Average was up 302.33 points, or 0.90%, at 33,839.03, the S&P 500 was up 55.39 points, or 1.40%, at 4,012.64, and the Nasdaq Composite was up 227.15 points, or 2.03%, at 11,423.37.

European shares
European shares were nearly flat on Tuesday as a sharp decline in British telecom group Vodafone, after it slashed its full-year forecasts, eclipsed gains in the utilities sector.
The continent-wide STOXX 600 index dipped 0.05% by 0950 GMT, trading within just a two point range since the opening bell.
The utilities index was up 1.0%. Leading the sectoral advance was UK-based renewable energy generator Drax Group with 4.2% gains, while British Gas owner Centrica rose 4.1% after it launched a share buyback programme.
Weighing the most on the STOXX 600 index was a 6.9% slide in Vodafone shares after the company cut its full-year free cash flow forecast and said annual earnings would come in the bottom range of its target.
European telecoms were down 0.8%.


Moves in European stock markets were tepid, with analysts pointing to uncertainty ahead of the release of US producer prices data for October later in the day and comments from more Federal Reserve officials dampening hopes of a pivot in US monetary policy.
The STOXX 600 still hovered near 11-week highs, but is still down 11.3% for the year as euro zone data continues to paint a grim picture of the economy.
London's FTSE 100 index was flat, while the midcap FTSE 250 index dipped 0.2%.

Tech View: Bullish candle
Headline index Nifty, which hit a record high, formed a bullish candle on the daily scale with a lower shadow. Analysts said this pattern indicates an emergence of buying interest in the market after a couple of days of choppy movement.

“Now, it has to hold above 18,350 zones, for an up move towards 18,500 then 18,600 zones whereas supports are placed at 18,250 and 18,188 zones,” said Chandan Taparia of Motilal Oswal.

Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) showed a bullish trend in the counters of NCC, Delta Corp, GAIL, Bharti Airtel and Pennar Industries, among others.

The MACD is known for signalling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.

Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of South Indian Bank, Coal India, J&K Bank, Electrosteel and Genus Paper, among others.

Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.

Most active stocks in value term
ICICI Bank (Rs 1,376 crore), Adani Ports (Rs 968 crore) and HDFC Bank (Rs 891 crore) were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.

Most active stocks in volume terms
RVNL ( Shares traded: 14.95 crore), Yes Bank (Shares traded: 7.91 crore), Zomato (Shares traded: 6.83 crore) and Vodafone Idea (Shares traded: 4.91 crore) were among the most traded stocks in the session on NSE.

Stocks showing buying interest
Shares of RVNL, Mazagon Dock, Apar Industries, Apollo Tyres and Sundaram Clayton, among others, witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signalling bullish sentiment.

Stocks seeing selling pressure
Shares of Sona BLW and DCM Shriram, among others, witnessed strong selling pressure and hit their 52-week lows, signalling bearish sentiment on the counters.

Sentiment meter favours bears
Overall, market breadth favoured losers as 1,616 stocks ended in the green, while 1,905 names ended in the red.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)